The Protectionist Pivot Rewiring The Global Economic Engine
Simran Singh, Meerut College, Meerut
ABSTRACT
Global trade has always been important for a nation’s growth both at domestic level and at global level. Having its roots jammed in the ancient times from Mesopotamia Egypt and the Indus valley long distance trade to development of silk root during Chinese Han dynasty to the First wave of globalization. However, this trading system is undergoing a structural transition from the era of Globalization to a period of geoeconomic fragmentation and strategic competition. This no restriction liberal trade dominated the trade from the period of 1990 to 2008, relying on the expanding global value chains, multilateral cooperation and one assumption that market efficiency would ensure a long-term stability. However, this statement didn’t prove true for a longer times successive shocks those including the global financial crises, disruption of supply chain and the escalation of geopolitical rivalry have exposed the shortcomings of this model and thus encouraged the Governments to priorities economic resilience, technological security and domestic industrial efficient capacity.
The renewed use of the protectionist and strategic trade policies is the key defining feature of this transformed trade policies. The US shift towards economic nationalization through the increase of the trade tariffs in 2025 signaled a decisive break from the earlier commitments of liberalized trade. These actions were a reflection of larger structural pressures brought on by technological competition, labor market upheaval, and worries about reliance on foreign supply chains. This expression commonly referred to as “CHINA SHOCK” explained that trade integration will lead to concentrated regional loss, strengthening political demands for state intervention in economic governance.
This study underpins that it is not about tariffs anymore. It relies its emphasis on the broader theoretical contest between the classical efficiency-based trade models and the developmental perspectives that lays its emphasis on industrial policy and national capability. This study lays down a comparative case studies of the Us “tariff based industrial policy” which is a shield for disruption in supply chain in contrast with China’s “Dual Circulation Strategy “locking in local demand and technical control and India’s “Atmanirbhar Bharat “initiative for more domestic factories with direct support.
The emergence of connector countries was also a result of the reconstruction of global production network, thus serving as intermediaries between competing economic blocs. This Geopolitical rivalry has rather than reducing trade flow has led to the establishment of alternate supply chains, thus paving way for more regionalized and strategically organized trading system. The paralysis of the World Trade Organizations dispute settlement mechanism has weakened the enforcement capacity of the multilateral trading regime, thus marking a shift towards bilateral and plurilateral trade agreements.
In conclusion, this transformation reflects not decline of the globalization but its reconfiguration into a more state-centered and security-oriented system. The world’s economy with selective economic integration, technology competition, and regional trade corridors, paves a way for multi-speed system.
Keywords: Geoeconomic Fragmentation; Strategic Trade Policy; China Shock; Dual Circulation Strategy;
